In the case of Missouri-Kansas Pipeline Co. v. United States et al., 1940, the Supreme Court examined whether or not a natural gas company was entitled to deduct from its gross income certain amounts paid for gas purchased under long-term contracts. The court ruled that these payments were capital investments and therefore could not be deducted as ordinary and necessary business expenses under section 23(a) of the Revenue Act of 1928. The decision was based on the fact that these purchases secured an essential supply source for their operations over a prolonged period, thus constituting an investment in future profits rather than current operational costs.

In the dissenting opinion for Missouri-Kansas Pipe Line Co. v. United States, Justice Roberts argued that the Federal Power Commission (FPC) had overstepped its authority by attempting to regulate a private company's rates for natural gas transportation and sales within state lines. He maintained that Congress did not intend to give FPC such broad powers under the Natural Gas Act of 1938, which was primarily designed to prevent monopolies in interstate commerce. Furthermore, he contended that if Congress had intended such extensive regulatory control over intrastate activities, it would have explicitly stated so in clear language rather than leaving it up to interpretation by administrative agencies or courts. Therefore, he believed that the majority ruling effectively rewrote legislation and violated principles of federalism by infringing upon states' rights to oversee their own economic affairs.